50 Cent Makes Millions Tweeting on Stock: Was it Legal?
50 Cent is known in the industry as not only a talent musician, but also as a shrewd businessman. He is said to have made over $100 million in his partnership with Vitamin Water.
But now the rapper may be under fire for using his Twitter account to hype up the stock price of H&H Imports. "HNHI is the stock symbol for TVG there launching 15 different products. they are no joke get in now," one tweet read. Another read, "one of the 15 products this year. If you get in technically I work for you. BIG MONEY."
H&H is a small company in Florida that also owns TV Goods, a company that markets products in infomercials. After 50 Cent tweeted about H&H to his 4 million followers on Twitter, their stock rose 290 percent. That resulted in a potential profit of $5.2 million for 50 Cent, who owns 7.5 million shares of the company, the Rolling Stone reports.
The price of shares of the company have come down some since the tweet, dropping by about 25 percent, though that still represents a significant increase from before the tweet. However, 50's tweets have caused some negative attention. ProPublica's Jesse Eisinger, said his tweet may be part of a "pump and dump" strategy used to artificially increase the value of the stock. Attempting to manipulate the market price of securities is illegal.
It seems that the rapper knew that people were going to move based on his endorsement. 50 even went so far as to add caveats about his endorsements, tweeting Do ur homework" and "Talk to financial advisor."
So far, it appears that 50 Cent may not have violated any laws, as he has not sold his shares in the company. The SEC declined to comment on the speculation, telling Fox411, "We can neither confirm nor deny (the reports)." Not that 50 could sell his shares if he wanted to: his shares are restricted by H&H from being sold.
Related Resources:
- 50 Cent Makes $10 Million Tweeting Stock Advice (Craveonline.com)
- Securities Fraud (FindLaw)
- $624 million: BofA-Countrywide Settles Investor Suit (FindLaw's Decided)